TQM and Competitive Advantage: A Review and Research Agenda

Article excerpt

Abstract:

The purpose of this paper is to develop a conceptual model that can be used in supporting the association between the many facets of total quality management (TQM) practices and its impact on competitive advantage. The theories of TQM and competitive advantage serve as the theoretical foundation to build up the conceptual model. This proposed conceptual framework could provide valuable knowledge to top management in the organizations to improve their quality management practices and subsequently achieving competitive advantage.

Keywords: Total quality management, competitive advantage, strategy, conceptual model

INTRODUCTION

Total Quality Management (TQM) is a management philosophy which focuses on continuous business improvement through company-wide employee participation and involvement with the fundamental objective of satisfying customers (Hill, 1991). This has led many researchers and academicians to focus their efforts on studying the quality progress, which is one of the most significant research topics in recent years (Filippini, 1997; Molina, Montes and Fuentes, 2004). In an institutionalized environment, good management practices are giving rise to organizations to emulate each other and resulting in emergence of common TQM practices over time (Westphal, Gulati and Shontell, 1997). Past empirical studies on the relationship between TQM practices and organizational performance have shown strong positive results (e.g. Lakhal, Pasin and Limam, 2006; Sila and Ebrahimpour, 2005). Several researchers reported that TQM has generally made its contribution to create value for companies which implemented it seriously (e.g. Hendricks and Singhal, 2001)

While there is considerable body of literature on TQM that have evolved into investigating the association between TQM and organizational performance as mentioned in the section above, there is lack of consensus regarding the influence of TQM on competitive advantage (e.g. Young, 1992) as well as lack of theoretical model to underpin these claims. Several scholars had confirmed TQM as a potential resource for achieving competitive advantage (e.g. Powell, 1995, Shenawy, Baker and Lemak, 2007). Thus, studying the relationship between TQM and competitive advantage is appropriate to TQM literatures since it is endowed with a theoretical base to explain the way in which TQM affects a firm's competitive advantage (Molina et al., 2004). In order to fill the gap and provide firms with practical assistance in dealing with TQM and its influence on competitive advantage, this study proposes a set of TQM dimensions, and develops a conceptual framework to investigate whether the application of TQM practices can generate competitive advantage and provide sustainability.

Given the above reasons, this paper discusses the previous literatures that investigate each TQM dimension and their relationship with competitive advantage. This paper is structured as follows: Firstly we will review the literature relevant to the theory of TQM and competitive advantage, followed by the relationship between TQM practices and competitive advantage. This will lead to the development of propositions between TQM and competitive advantage. Finally, we will discuss the conclusions with respect to the new knowledge derived from this research note and present both theoretical and managerial implications.

TQM Practices and Competitive Advantages

This section presents the theoretical review of TQM and competitive advantage to serve as the theoretical foundation to build up the conceptual model. As of to date, the literatures investigating the links between TQM practices and firms' competitive advantage have been mainly untrustworthy. In the literature of TQM, there seems to be a general understanding pertaining to the key practices of TQM that contribute towards the development of 'business excellence' and ability to deal with competitive advantage. …